Hermès can't keep up with handbag demand

As Hermèss profits soar, the French luxury group says it cannot keep up with consumer demand.

The Birkin maker reported a 50% surge in profits for the first half of the year and based on strong demand for its exclusive handbags in the US and Japan. Sales jumped 22% to 1.31bn in the year to June.

But Chief Executive Patrick Thomas cautioned investors that the rate of growth is likely to slow, as the company simply cant produce stock fast enough to keep pace with global lust for its Kelly, Constance and Birkin bags. Even natural disasters havent quelled shopper appetites, the brand said.

We haven't yet seen a reduction in the number of people coming into our shops, not even in Japan [following the earthquake and tsunami disaster], Thomas said, reported the Guardian. The trend is still very good, but is lower than that of the first half. This is not at all due to a drop in the number of people in our stores. There are stores where we are a little tight on stocks. This isn't an alert. It's not serious. We are selling at the rate we are producing.

Hermès has always resisted efficiency drivesmost Birkin bags take a single craftsperson two full days to createbut the company said it has added nearly 400 new workers to speed its production times.

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